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President of Russia Dmitry Medvedev: Igor Nikolayevich [Slyunyaev], I want to start by saying that the Academy makes a very good impression. You could call it an exemplary military academy. In our work to modernise the military education system we should aim to develop the majority of our military educational establishments along these lines.

We just visited the classrooms and the barracks. The barracks hold an important place in the students’ lives. These barracks are well-built and modern, but overall, as an experiment, it would be good to examine what we can do to have students, starting right from the first year of their studies, living not in barracks but in family-type hostels or simply in town, because this [living in barracks] deters a lot of young people who would otherwise like to pursue a military career and become an officer.

Based on the results of our work today, I think I will issue an instruction accordingly to the Defence Ministry.

Kostroma Region not only has good educational establishments but also excellent potential in the forestry sector. I would like to hear from you today what projects you have in the area of high value-added timber processing. After all, it is in everyone’s interests for us to produce high value-added products using modern technology rather than simply send load after load of round wood off for export (which we have learned to do very well indeed).

Governor of Kostroma Region Igor Slyunyaev: It is indeed in our interests to overhaul our forestry industry. One of our objectives is to build modern high-tech processing facilities.

One of our priorities is the project to build a pulp and paper mill that will produce not just pulp but also paper. Preparations are already underway in the region for this project and we think it will be carried out in 2011.

Dmitry Medvedev: What will be the environmental impact?

Igor Slyunyaev: One of our demands on potential investors is that the project must conform to the strictest environmental standards.

Dmitry Medvedev: Yes, we need to apply the strictest environmental standards to projects such as this, all the more so as our neighbours are also building a pulp and paper mill and, using cheap raw materials from Russia, are producing the finished goods and, of course, receiving all the added value that goes with them.

Igor Slyunyaev: The measures the Government is currently implementing – the gradual increase in customs duties on round wood – are forcing our partners to relocate production, including high-tech production, to the Russian Federation itself, including Kostroma Region.

Dmitry Medvedev: This is also in our interests. What is the situation with construction materials?

Igor Slyunyaev: Unfortunately, we have not seen any construction boom in Kostroma Region over these last ten years.

We have not built much housing and are probably not among the leaders in carrying out the priority national project for housing construction. But our region is doing quite well in construction materials production. One of our objectives is to develop cement production in the region. The right conditions are all in place. We have limestone deposits and we have a good logistics system.

Dmitry Medvedev: What about the gas needed for cement production?

Igor Slyunyaev: We are planning the quantities of gas needed for carrying out this project.

Dmitry Medvedev: Have you reached agreements with Gazprom?

Igor Slyunyaev: Alexei Borisovich Miller [Chairman of the Board of OAO Gazprom] has given the project his backing.

Dmitry Medvedev: Good.